Correlation Between Sims and Enegex NL

Can any of the company-specific risk be diversified away by investing in both Sims and Enegex NL at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sims and Enegex NL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sims and Enegex NL, you can compare the effects of market volatilities on Sims and Enegex NL and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sims with a short position of Enegex NL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims and Enegex NL.

Diversification Opportunities for Sims and Enegex NL

-0.16

Correlation Coefficient

Sims  Enegex NL

Good diversification

The 3 months correlation between Sims and Enegex is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sims and Enegex NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enegex NL and Sims is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sims are associated (or correlated) with Enegex NL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enegex NL has no effect on the direction of Sims i.e., Sims and Enegex NL go up and down completely randomly.

Pair Corralation between Sims and Enegex NL

Assuming the 90 days trading horizon Sims is expected to generate 0.64 times more return on investment than Enegex NL. However, Sims is 1.57 times less risky than Enegex NL. It trades about 0.09 of its potential returns per unit of risk. Enegex NL is currently generating about 0.01 per unit of risk. If you would invest  1,343  in Sims on December 3, 2024 and sell it today you would earn a total of  111.00  from holding Sims or generate 8.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sims  vs.  Enegex NL

Sims

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sims are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Sims may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Enegex NL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enegex NL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Enegex NL is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sims and Enegex NL

The main advantage of trading using opposite Sims and Enegex NL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims position performs unexpectedly, Enegex NL can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Enegex NL will offset losses from the drop in Enegex NL's long position.

The idea behind Sims and Enegex NL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.